Banks lead stock gains after First Citizens buys SVB assets

News Summary

  • Banks and energy stocks led the gainers in the benchmark index, outweighing losses in technology and communications companies.The Dow Jones Industrial Average rose 0.6% to 32,432.08, while the Nasdaq composite fell 0.5%, to 11,768.84, reflecting losses in Google parent Alphabet and other tech companies.
  • Investors have been hunting for which banks could be next to fall as the system creaks under the pressure of much higher interest rates.On Wall Street, the S&P 500 eked out a 0.2% gain to 3,977.53 after having been up by as much as 0.8%.
  • It indicated last week that the troubles in the banking system could end up acting like rate hikes on their own, by slowing lending.Huge, quick swings in expectations for the Fed have caused historic-sized moves in the bond market.Yields jumped Monday in their latest lunge.
  • It was above 4% earlier this month.Lower rates can act like steroids for stocks, and technology and other high-growth stocks tend to get a particularly big boost.
  • Many economists were already expecting an economic downturn before all the struggles for banks.“Unfortunately this is what happens when you tighten policy that quickly,” Amanda Agati, chief investment officer of PNC Asset Management Group, said about the past year’s swift rise in interest rates.
  • That has helped the S&P 500, which is dominated by such Big Tech stocks as Apple and Microsoft.Other areas of the market that don’t benefit from such Big Tech stocks have been weaker.
By STAN CHOE and DAMIAN J. TROISE AP Business WritersNEW YORK (AP) Socks are rising on Wall Street Monday as battered banks show more strength, at least for now.The S&P 500 was 0.6% higher [+4930 chars]